5 ways to identify a property lemon
Buying a property is hard enough, but choosing one that will give you great returns at an affordable price can be pretty difficult, especially for first time buyers and investors who have little experience in the property market.
For the untrained eye, distinguishing between a property that has potential and one that should be avoided at all costs can be difficult. But it’s not all about the age of the property and the state that it’s in. You might have the nicest property in the neighbourhood, but if there are no amenities close by and no public transport options, then this can negatively affect its value and actually put off people from wanting to live here.
So how do you spot a lemon? Here are my 5 top tips to keep in mind when looking for your next property.
1) Location – This is really important to consider, because once you purchase a property you can’t physically move it to a new location – you’re stuck here. You need to review what is in the surrounding area and what might be adjacent or overlooking the property, as you don’t necessarily want to live opposite a waste centre for example. Checking the area for local amenities is also a must, especially if you are looking to rent your property out. If shops, schools and transport modes are a long way away, then this will not be appealing for tenants.
2) Aspect – For some people, the direction your apartment faces is important as this will determine the amount of sunlight your property receives. Too much sunshine means it could get very hot, whilst too little means you will have to rely on lighting more which in turn costs more to run.
3) Physical layout – the layout of the property plays a vital role in determining whether occupiers or tenants want to live in this property in the future. In some cases the layout may be impractical for families with children or the bathroom or bedrooms are not ideally positioned. Long hallways are not really favoured upon as there is a lot of lost space. However, you might be able to see past this and take the opportunity to create a better layout through some renovation.
4) Any structural problems – For new and off the plan properties this shouldn’t be too much of a concern, but you should definitely do your due diligence on any established properties to find out if there are any structural problems before you buy as serious problems could cost you thousands to fix. Ensure you look at strata reports, as well as building and pest inspections which can highlight any major issues that you should be concerned about.
5) Too few bedrooms – Each suburb that you look to buy in will cater for different demographics, so if you are interested in a two bedroom apartment in a suburb that primarily has three bedrooms appealing to families with two children then this property might not do too well.
Of course there are many other factors that you should look at, but I believe these are the key factors that should not be dismissed. Buying an older property that has worn out carpets, ragged curtains and fading wallpaper is not the end of the world as it can benefit from a spot of renovation to bring it back to life and to suit modern living, although it will cost more money. That’s why a new apartment can sometimes be better, as usually there is less work that needs to be carried out. As long as this property is well located and structurally sound then this property could have potential.
Let’s face it; no one wants to buy a property that will lose them money.
Published on 17th of December 2014 by Marty Stanowich